Pigs CAN Fly...Citi Shareholders Revolt...

[GRG55]

Took a little while, didn't it.

Citigroup loses advisory vote on executive compensation

DALLAS | Tue Apr 17, 2012 4:15pm EDT
(Reuters) - Citigroup Inc (C.N) shareholders gave a vote of no confidence to the bank's executive compensation plan on Tuesday, dealing a surprise embarrassment to Chief Executive Vikram Pandit.


Only 45 percent of shareholders endorsed the pay plan in an advisory vote required under the Dodd-Frank law, Michael Helfer, general counsel and corporate secretary, said at Citi's annual meeting, citing preliminary vote totals.


Citigroup may have upset shareholders by increasing Pandit's pay to $14.8 million last year, similar to executive pay levels before the credit crisis struck, despite the challenges that the bank still faces. Last month, Citigroup was one of only a handful of large financial institutions that failed to win approval from regulators for a dividend increase or share buyback...

[mmr]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

The key word being "advisory" (non-binding)

[c1ue]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

The key word being "advisory" (non-binding)

+1

And the shareholders revolting - isn't it a bit late for that now? All the way down from (split adjusted) 550 to 10, now up to 35ish, it seems this revolt is closing the barn door after all the pigs have escaped.

[LorenS]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

Mutual fund managers are horrible stockholders and yet they own a very large percentage of shares.

Like most Americans, my 401k plan is riddled with mutual funds. The managers seldom, if ever, actually vote the shares like they owned the company. If you own shares in a mutual fund you really are not an equity owner and have lost any ability to really use your ownership for any kind of oversight.

There are really very few shareholders left. Many investors, like myself, have been stripped of our equity stake in the economy. Many of those who can actually vote shares, don't really care about the company, they are managing other people's money. That's what makes this rather interesting.

[GRG55]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

+1

And the shareholders revolting - isn't it a bit late for that now? All the way down from (split adjusted) 550 to 10, now up to 35ish, it seems this revolt is closing the barn door after all the pigs have escaped.

TRANSLATION: Well the bankers took over the economy, and used their profits to bribe the politicians to allow them to keep pillaging, and now that they've blown it all up and the damage is done, owners of the banks in question deserve nothing but my scorn for their belated efforts to register dissatisfaction and maybe start to bring about some constructive change.

[GRG55]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

Mutual fund managers are horrible stockholders and yet they own a very large percentage of shares.

Like most Americans, my 401k plan is riddled with mutual funds. The managers seldom, if ever, actually vote the shares like they owned the company. If you own shares in a mutual fund you really are not an equity owner and have lost any ability to really use your ownership for any kind of oversight.

There are really very few shareholders left. Many investors, like myself, have been stripped of our equity stake in the economy. Many of those who can actually vote shares, don't really care about the company, they are managing other people's money. That's what makes this rather interesting.

You got it...

[c1ue]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

TRANSLATION: Well the bankers took over the economy, and used their profits to bribe the politicians to allow them to keep pillaging, and now that they've blown it all up and the damage is done, owners of the banks in question deserve nothing but my scorn for their belated efforts to register dissatisfaction and maybe start to bring about some constructive change.

TRANSLATION of TRANSLATION: Somehow a non-binding vote by a group of clueless passive investors means something now, even though such non-binding votes of no confidence have occurred before. And the previous bout of non-binding votes of no confidence were also after a period of negative stock market performance:

http://en.wikipedia.org/wiki/Say_on_...holder_revolts

• GlaxoSmithKline shareholders voted 50.72% (advisorily) against a £22m bonus salary and stock severance package for CEO Jean-Pierre Garnier. Chairman Sir Christopher Hogg said it was just the difference in culture to the US that was holding Britain back and they should accept it. The TUC had been lobbying pension funds. (May 2003)
• ITV shareholders were 40% against a £15m (£1.8m cash, rest shares) payoff to Chairman Michael Green. It was justified on the basis that he would have taken legal action were it not paid, because he was removed prior to the Carlton/Granada merger.
• Berkley Managing Director and founder of the property company had 47% of shareholders vote against his £1.2m (out of a total £4.7m package) under a long term incentive scheme that he had not actually belonged to. (August 2003)

Is it going to be different this time?

[GRG55]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

TRANSLATION of TRANSLATION: Somehow a non-binding vote by a group of clueless passive investors means something now, even though such non-binding votes of no confidence have occurred before. And the previous bout of non-binding votes of no confidence were also after a period of negative stock market performance:

http://en.wikipedia.org/wiki/Say_on_...holder_revolts[/LIST]
Is it going to be different this time?

Yes, it is different this time.

And since you are such a bright boy I imagine you won't have any difficulty recognizing in which way :-)

[Chris]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

Looks like he's making off like a 'Pandit'....

http://www.telegraph.co.uk/finance/n...-for-4.3m.html

[c1ue]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

Yes, it is different this time.

And since you are such a bright boy I imagine you won't have any difficulty recognizing in which way :-)

Actually, I don't see what is different this time.

Please elucidate.

If you are pointing at Dodd-Frank as the difference, I counterpoint with Sarbanes-Oxley. That law didn't seem to have any effect whatsoever even when C-level executives provided proof in Congressional testimony.

[dcarrigg]

Re: Pigs CAN Fly...Citi Shareholders Revolt...

Took a little while, didn't it.

Citigroup loses advisory vote on executive compensation

DALLAS | Tue Apr 17, 2012 4:15pm EDT
(Reuters) - Citigroup Inc (C.N) shareholders gave a vote of no confidence to the bank's executive compensation plan on Tuesday, dealing a surprise embarrassment to Chief Executive Vikram Pandit.


Only 45 percent of shareholders endorsed the pay plan in an advisory vote required under the Dodd-Frank law, Michael Helfer, general counsel and corporate secretary, said at Citi's annual meeting, citing preliminary vote totals.


Citigroup may have upset shareholders by increasing Pandit's pay to $14.8 million last year, similar to executive pay levels before the credit crisis struck, despite the challenges that the bank still faces. Last month, Citigroup was one of only a handful of large financial institutions that failed to win approval from regulators for a dividend increase or share buyback...

Management ignored the shareholders' votes. This much was expected. But now Stan Moskal has filed a shareholder suit against Citi. From what I understand, Citi will have precedent on its side, but this will be the first test of Sec. 956(b) of the Dodd Frank Act after a majority (but non-binding) shareholder vote against providing excessive compensation. The courts will now decide whether this will have teeth moving forward. Of course even if the lower courts side with Moskal, if Citi appeals it high enough, I have no doubt that the current Supreme Court will give them their way.

It should be an interesting ride nonetheless. Let's see if we can't keep this thread alive to follow what happens. It will take a while. But it seems worth watching.